PSA to cut 5,000 jobs in France, union boss says

PARIS -- PSA/Peugeot-Citroen plans to cut 5,000 jobs in France, an official from the CGT union said, suggesting a higher proportion of layoffs in the automaker's home country than previously disclosed.

Jean-Pierre Mercier, union representative at PSA's factory in the Paris suburb of Seine-Saint Denis, said Tuesday that 1,900 French manufacturing jobs would be cut, along with another 3,100 in areas like sales, information technology and research and development.

PSA declined to comment on the cuts, but reiterated earlier statements that firings or voluntary departures were planned.

Last month, the automaker announced 6,000 layoffs across Europe, as part of its effort to reduce costs by 800 million euros ($1.1 billion) to help it weather a tougher European market.

The losses include 1,000 manufacturing jobs and 2,500 contractor positions.The other 2,500 job cuts would come mainly in sales, marketing, IT and R&D, PSA added.

In October, the carmaker warned that its core carmaking business would barely make a profit and it expects 2011 free cash flow to be negative this year as it battles with downward pressure on prices in Europe.